Wealth for the World
Donation Methodology
Wealth for the World donates two percent of its assets annually.
The two percent distributions are offset by an expected annual return of 7 percent, so that the assets grow by about 5 percent annually despite the regular distributions. The resulting compound interest effect makes it possible to distribute more money in the long term than was originally donated into the fund.
The 2% distribution rate is calculated to maximize the total sum of disbursements over time. The calculation incorporates expected capital returns, the diminishing marginal utility of additional donations, and the risks of delayed payments.
You can find our model for calculating the optimal donation rate here.
It was developed in collaboration with the economist Stefan Pauly and is based on the research of Philip Trammell from the Global Priorities Institute (University of Oxford).
It was developed in collaboration with the economist Stefan Pauly and is based on the research of Philip Trammell from the Global Priorities Institute (University of Oxford).
With an annual distribution rate of two percent and an expected real market return of seven percent, the donation payments and the asset development (= impact) of donations to Wealth for the World can be calculated:
Loading...